Essential Life Insurance Facts for Seniors

People often wrongly assume that those aged 70 or above won’t be offered coverage as there is a higher likelihood of that person dying within their given term.

Given that this is true, and it is, you may wonder why it is that policies are available to seniors. It all has to do with the laws of probability.

As far as insurance companies are concerned, there are controllable variables when calculating life expectancy. Once these variables are controlled, the company is willing to make a "bet", so to speak.

Burial Insurance for Seniors

Burial Insurance (often also referred to as final expense insurance or funeral insurance) is another basic issue policy which will cover you up to 100 years of age.

Burial insurance covers your funeral expenses in advance of the time of your demise, relieving your loved ones of this financial burden at a time of grief. Burial insurance will also take care of outstanding debts and other financial matters on your behalf.

Planning your funeral in advance also ensures that many difficult decisions are made by you and not your nearest and dearest. These include whether you wish to be cremated or buried; your choice of casket or urn; dividing your estate, and which insurance firm you wish to provide you with a plan for seniors.

Financial Restrictions on Burial Insurance:

Burial insurance is designed to cover final expenses

Burial insurance can only be used to cover associated funeral costs

You won’t receive a lump sum prior to your death

There are restrictions on the manner in which you spend burial insurance

Burial insurance does not expire; it lasts until death

You have limited options with burial insurance

No cash value accumulates with burial insurance

You cannot borrow against burial insurance

You cannot cash out burial insurance

Many choose to pay their final expenses from their life insurance policy. This can be an effective way to manage your funeral costs, but if your policy isn’t so large it can use up a lot of money that would have otherwise gone to your relatives.

As with anything, funeral costs are continually rising. By taking out a burial insurance policy, you are afforded the peace of mind that comes with the knowledge that you and your family are covered at the end of your life.

Is it worth purchasing insurance for final expenses?

Before deciding to buy burial insurance, take some time to review your current plan. If your policy is worth a considerable amount of money, it may not be in your best interests to get additional coverage.

For those on a fixed budget, whose families may not be getting much after they expire, monthly burial insurance payments could be a cost effective method of ensuring that they don’t lose out financially when you’re gone.

As difficult a subject matter that this is to approach, you cannot ignore the practicalities and the interests of those around you. Look at your financial situation and consider the benefits. Feel free to contact us today, should you wish to discuss burial insurance with an understanding insurance professional.

Term life insurance and life expectancy for seniors

Here's something else to consider: life expectancy in the U.S. is about 75 for men, and for 80 years for women.

But this statistic doesn't really tell much because it is an average for all people. What is not clear by this general set of statistics is how long you may expect to live once you've reached a certain age.

For example, a woman who reaches the age of 65 may expect to live another 16 years! Have a look at the following life expectancy chart:

Life Insurance Expectancy for Seniors Aged 65-90

Age

Male

Female

65

17.18

19.87

66

16.45

19.08

67

15.72

18.30

68

15.05

17.50

69

14.38

16.75

70

13.72

16.04

71

13.05

15.30

72

12.42

14.59

73

11.80

13.90

74

11.19

13.20

75

10.60

12.53

76

10.03

11.89

77

9.46

11.22

78

8.92

10.61

79

8.40

10.02

80

7.89

9.42

81

7.40

8.65

82

6.92

8.30

83

6.48

7.75

84

6.05

7.25

85

5.63

6.72

86

5.24

6.30

87

4.87

5.82

88

4.53

5.42

89

4.20

5.05

90

3.90

4.65

But these are just averages for anyone who might have reached the age bracket of 65 and 90.

Life expectancy for those between 65 and 90 years of age who qualify for a policy can be expected to be much higher.

Precise data is not easily available to the general public, but a female, aged 71 who is height/weight proportionate with no significant medical history might easily expect to live another 20 years, and this number wouldn't be significantly different for males.

To a certain extent, life expectancy can be inferred by the fact that a life insurance company will be happy to sell a 70 year-old female a 20 year term life policy for up to just about any amount she wants as long as she is willing to pay the premiums.

It's not really about age so much as it is about odds. Suppose you had ten million dollars.

Suppose further that you had a good friend who was 90 years of age who you knew as an active and vibrant person who arose every day at 5 a.m. and walked 3 miles along the shore line.

Would you be willing to bet ten thousand dollars against your ten million that your friend would live another year? If a year seems too long to risk such a sum, would you be willing to make the bet that your friend would live another month?

What about a week, a day, an hour or even a second? Even though the money at stake is rather large, and the payoff relatively small, at some point it becomes almost a sure bet.

So, up to a certain point, it's not really about age since it is really a simple matter of adjusting the price of the policy to account for increased risk.

The reasons why life insurance companies issue life insurance to seniors

Life insurance companies make it their business to know the odds, and when information has been collected for many years for millions of people, they are in a position to make a fairly good bet on how much to charge etc. based on life expectancy.

But there is something else very important to consider: the price of life insurance in not based solely on life expectancy.

It is also based on the number of policies that lapse each year. As people age the probability of death increases with each passing year, as does the likelihood of their plan lapsing. Should a 70 year-old take out 30 years' worth of insurance which lapses in 15, then a great deal of the risk inherent in such as policy is removed from the standpoint of the life insurance company.

The term life insurance health exam is basically the same for all

Another important thing to know about seniors and life insurance is that companies do not suffer from the same kind of ageism that a great deal of the rest of the population is afflicted with. Age in and of itself will generally not make a great deal of difference.

To give an example, a 38 year old smoker who has a pre-existing condition such as a heart problem will have more trouble getting coverage than a 75 year old healthy man who has no history of tobacco use. The health status of each applicant is judged according to the same set of tests.

There are no policy limits for seniors

The same idea basically applies to the amount of life insurance available to seniors. A company will not say, "Well, we'll issue a policy, but because you're 75 it can only be for this much."

Either you are an acceptable risk or you're not. If you are an acceptable risk, your premiums will be higher if you are older, but there won't be any restrictions.

If you are a senior and you are determined to be in good health, then there is an excellent chance that you will be able to obtain life insurance if you wish so.